Your Annual Corporate Checkup
13/07
Whether or not your business is incorporated, it is a good idea to sit down with your attorney once a year to review ways to protect your business and your personal assets. Unfortunately, in today’s litigious society, business owners are easy targets for unscrupulous litigants looking to create a windfall for themselves.
If you are a business owner and you do not have an attorney that you can call when routine, yet important legal issues come up, you should establish such a relationship. Many people are afraid to call attorneys because they believe that “the clock is always ticking” and that they will receive a large bill at the end of the month. This is not always the case. Many firms have flexible arrangements with corporate clients that are mutually beneficial.
An annual business checkup can include many important functions. If your business is incorporated, you will certainly want to know whether all required filings have been made and you want to know that your assets are protected. If you are not incorporated, the annual checkup will serve as a great way to determine whether it is worth doing so. You will want to discuss with your attorney whether the integrity of your corporation has been preserved so as to protect against IRS audits and attempts to pierce your corporate veil.
Your corporate checkup is also a good time to review compliance with corporate bylaws pertaining to the company’s annual meeting. You want to make sure that proper notice was given to shareowners, corporate formalities are being followed, proper minutes are being recorded and, where needed, proper resolutions are documented.
While you are reviewing the legal formalities with your attorney, it is often a great time to review the business side of your company as well. A strategic planning session involving your attorney, accountant and financial planner is a great way for you to focus on the direction in which your company is heading. The input from your advisory team can help in the establishment of realistic goals for the upcoming year. Your advisory team can also help narrow the focus so that you are in a better position to reach your goals and objectives.
It never hurts to strategize and explore methods to increase your company’s bottom line. An annual corporate checkup is a great way to focus on the often neglected legal and financial aspects of your business. When your business has two or more shareowners, it is imperative that you meet periodically to make sure that all owners are “on the same page.” When the legal and financial aspects of a business are ignored to long, it is almost always a recipe for disaster.
For interested business owners who are readers of this column, you can contact Meyer & Spencer LLP to ask about its Inside Counsel Advantage Program. This is a program that Meyer & Spencer LLP offers its corporate clients and it includes, in addition to some of the items mentioned herein, free unlimited telephone advice. If you mention this column, you will receive a 10% discount on this program.